GROSS. — free commercial calculators for UK FMCG brand teams
How supermarket payment terms turn into working capital: the debtor-day maths, the shelf-fill trap, what faster payment is worth, and a free tool to model your own cash curve.
Sixty days is not a detail — it is working capital, and it is yours. The debtor-day maths, the shelf-fill trap, and what terms are worth.
When a UK retailer lists your product, the commercial terms fix two clocks: how long the retailer takes to pay your invoice (often quoted as 30, 60 or, historically, 90 days), and how long your own supplier gives you to pay for the goods. The gap between those clocks, multiplied by your weekly sales, is cash you are lending to the trading relationship — permanently, for as long as the listing runs.
The arithmetic is short. Sell 5,000 units a week at an 81p invoice price and you are owed roughly £40,000 at any moment on 60-day terms. If your co-packer wants paying in 30 days, half of that gap is funded by somebody — and that somebody is you, your overdraft, or an invoice financier taking their own margin off your margin.
Going live means shipping enough stock to fill every store before a single unit sells through: cases per store, times stores, bought and invoiced in week one. That one order front-loads both sides of the cash line, and on long payment terms the goods bill leaves your account weeks before the fill converts to cash. It is the single most common unpleasant surprise in a first listing, and it is entirely forecastable.
Promotions compound it: an uplift you agreed on paper is extra stock you buy early and extra invoices you wait on, while the funding for the price cut is deducted before payment. A heavily promoted launch on long terms can be profitable on every line of the P&L and still be the reason payroll is tight in month three.
Payment terms are a commercial lever like any other, and both sides know it. Faster payment is worth a specific number of pounds to you (your funding cost on the gap); a retailer conceding terms will expect it back somewhere else. The mistake is trading a visible number (price, margin) for an invisible one (terms) without pricing both. Work out what 30 days versus 60 costs you per year, and negotiate with that number on the table.
Several of the large UK multiples have made public commitments to pay smaller suppliers faster, and the Groceries Supply Code of Practice constrains how the designated retailers handle deductions and delay. Do not rely on any of it in a model: put your actual contractual terms into the maths and let the cash curve tell you the truth.
Broadly 30 to 60 days from invoice for branded suppliers, with faster terms increasingly offered to the smallest suppliers and longer terms not unheard of historically. Your contract is the only number that matters — model that, not the average.
As a rough frame: weekly invoiced sales × payment-term weeks, plus the one-off shelf fill, minus whatever your own supplier terms fund. A healthy mid-size listing on 60-day terms can need tens of thousands of pounds before it pays for itself — work yours out properly rather than by rule of thumb.
Yes — terms are commercial, not fixed. The discipline is to price what faster payment is worth to you (your funding cost on the receivable) before the meeting, so a terms concession traded against margin is a calculation rather than a hope.
The Groceries Supply Code of Practice — rules governing how the UK's designated large grocery retailers deal with direct suppliers, including protections around deductions, delisting and variations. It is worth knowing, and it is not a cash-flow plan: model your actual terms.
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